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American Resources Policy Network
Promoting the development of American mineral resources.
  • Why Cobalt Should be High on Your Radar

    In a recent article, the Financial Times zeroes in on one of the metals followers of ARPN will know is becoming increasingly indispensable to 21st Century clean energy technology: Cobalt. 

    Once an obscure metal you rarely heard about, this co-product of Nickel and Copper is increasingly afforded “critical mineral status” – primarily because of its application in Lithium-ion battery technology.

    The Financial Times calls out electric carmaker Tesla for only once mentioning the word “cobalt” in a 111-page draft prospectus for a proposed $1.5bn senior note offering:

    “This cursory mention of the electric carmaker’s dependence on the metal must have passed a formulaic test of what securities laws require. It may not, however, pass a laugh test among those familiar with the Democratic Republic of Congo, which accounts for more than 60 per cent of world cobalt production and is the principal prospective source of new supply. Tesla has always been a company of the future funded by investors’ equity. The problem with a debt issue (the $1.5bn note matures in 2025), is that there is a more certain date with material reality.

    It has become more apparent that cobalt supply could be the choke point for the mass production of electric vehicles that are capable of replacing the standard car or light truck.”

     The Financial Times piece correctly argues that the most significant barrier to EV mass production is not so much price – even though prices have indeed soared – it is the availability of supply. As we have previously pointed out

    “On a global scale, 93 percent of the Cobalt refined in China – the world’s biggest Cobalt consumer – originates in the DRC, which, at 3,400,000 metric tons, is also home to the world’s largest Cobalt reserve.
    Roughly 62 percent of global refined Cobalt is sourced in the Democratic Republic of Congo (DRC), where production conditions involving involve child labor and poor environmental standards in some instances, have invited sharp criticism, but have prompted tech companies to re-evaluate their sourcing strategies.”

    And while optimists point to new Cobalt development projects around the world and argue that “lithium-ion batteries’ cobalt requirements can be engineered down,” there is no near-term silver bullet. Substitution will require significant amounts of time, testing and investment, and the DRC will remain a crucial factor. 

     Caspar Rawles, analyst for Benchmark Mineral Intelligence, recently put it bluntly: 

    “While there are a number of new cobalt projects being developed around the world, quite simply: there will be no electric vehicle industry without DRC cobalt.” 

    Domestic projects coming online are welcome developments to alleviate certain pressures and concerns, and should be part of a comprehensive overall mineral resource strategy for the United States but they can only be a starting point. Cobalt needs to be high on everyone’s radar, not a footnote in dusty financial documents. 

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  • Cobalt Demand on the Rise – But What About Supply?

    Once an obscure metal most people had rarely heard about, Cobalt, a co-product of Nickel and Copper, is becoming a hot commodity and is increasingly afforded “critical mineral” status.

    The main reason for this development is Cobalt’s application in Lithium-ion battery technology. Soaring demand for rechargeable batteries and the growing popularity of electric cars have sent the price per ton of Cobalt soaring almost 70 percent this year already – however demand is only one side of the coin.

    For tech giants like Apple and Tesla, which rely heavily on Lithium-ion technology to fuel their products, it is the supply side that is clouding the picture.  Writes Eshe Nelson for Quartz: 

    “Bullish investors have pushed Tesla and Apple stock to record highs, but a steady supply of cobalt will be crucial to making their plans a reality. In part, fears about cobalt’s scarcity are behind the metal’s recent price surge. Cobalt is hard to get a hold of, and the market remains relatively small—93,000 metric tons were produced in 2016.”

    On a global scale, 93 percent of the Cobalt refined in China – the world’s biggest Cobalt consumer – originates in the DRC, which, at 3,400,000 metric tons, is also home to the world’s largest Cobalt reserve.

    Roughly 62 percent of global refined Cobalt is sourced in the Democratic Republic of Congo (DRC), where production conditions involving involve child labor and poor environmental standards in some instances, have not only invited sharp criticism, but have prompted tech companies to re-evaluate their sourcing strategies.   In March, Apple announced a temporary halt of cobalt purchases from artisanal mines in the DRC, while Elon Musk has made ambitious claims that Tesla will “produce 500,000 electric vehicles a year by 2018,” and that the Cobalt used “will be sourced exclusively in North America.”

    Caspar Rawles, analyst for Benchmark Mineral Intelligence, puts it bluntly:

     “While there are a number of new cobalt projects being developed around the world, quite simply: there will be no electric vehicle industry without DRC cobalt.” 

    Going forward, our friends at Benchmark predict a very tight market for Cobalt through 2020, at which point we will likely see a deficit.  Meanwhile, political unrest in the context of the DRC’s upcoming election may add uncertainty to the supply picture.

    So while the United States will in all likelihood not be able to meet its Cobalt needs self-sufficiently, domestic projects coming online are welcome developments to alleviate pressures and concerns, and should be part of a comprehensive overall mineral resource strategy for the United States.

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  • EVENT: Experts to Discuss Critical Mineral Supply Chains and Energy Storage Revolution

    Our friends at Benchmark Minerals are back in town and they’ve done it again: The team led by Benchmark Minerals Managing Director and ARPN expert panel member Simon Moores has once more put together a great lineup for a half-day event in Washington, DC this Wednesday. Speakers like David Abraham, Director of the Technology, Rare [...]
  • Cobalt – First Steps Towards Reducing Mineral Resource Dependencies?

    A recent piece for InvestorIntel zeroes in on a metal which, due to its growing use in battery technology, coupled with a challenging supply scenario is increasingly afforded “critical mineral” status – Cobalt. A co-product of Nickel and Copper, the metal’s recent history, as author Lara Smith argues, has been “chaotic.” ARPN agrees that about sums it up. Criticism regarding the [...]
  • Through the Gateway: Nickel – Powering Modern Technology

    Over the course of the last few weeks, we reviewed Nickel and its co-products Cobalt, Palladium, Rhodium and Scandium as part of our trip “Through the Gateway.” We’ve established that the importance of each of the co-products is growing as the revolution in materials science advances. Meanwhile, our import dependence for each of the co-products is [...]
  • Through the Gateway: Cobalt – A Critical Mineral Under Scrutiny

    A lustrous, silvery blue, hard ferromagnetic, brittle element, Cobalt’s physical properties are similar to Iron and Nickel. It forms various compounds, stable in air and unaffected by water.  Main uses include many alloys, including superalloys used in aircraft engine parts and high-speed steels, as well as magnets, and catalysts, to name but a few. It’s [...]

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